Datuk Anthony Adam Cho, branch chairman of the Real Estate & Housing Developers’ Association (REHDA) Malacca, speaks to iProperty.com about the transformation progress in Malacca and how REHDA plans to enhance the potential of the State.
How does the state government balance between the preservation of heritage and modern developments in Malacca?
Under the UNESCO’s terms and conditions, you cannot deviate too much from the old building architecture. Therefore, UNESCO will not allow any structural demolitions and prohibit any structures that are more than the stipulated stories or more than 14 feet within the heritage area.
In the vicinity of the area – from Jonker Street up to the Christ Church building and Jalan Hang Tuah, any high-rise buildings are not allowed to be built.
This regulation does not include the new areas like Mahkota because although adjacent to the heritage site, it is away from it.
If any of these conditions are breached, UNESCO holds the right to remove the heritage status of Malacca. The committee who enforces the UNESCO regulations are executives from the Malacca state council members, senior architects, as well as the UNESCO committees.
What is the direction for Malacca’s construction industry upon launch of the Construction Industry Transformation Programme (CITP)?
REHDA Malacca recently signed a pledge to uphold the Construction Industry Transformation Programme (CITP) that will look into a more sustainable environment in Malacca. What this programme means is that there is a future for a green Malacca, where there will be sustainable living conditions for construction workers and introducing more ‘green’ products in the developments.
However the term ‘green’ is too loosely interpreted, as conventional wisdom only defines a ‘green’ building as a structure with ‘green’ features. The idea of constructing a ‘green’ building concept should ideally start from the beginning to the end – from manufacturing and transportation and to construction
It all begins with how developers discharge their refuse and how they reprocess the recyclables. Having ‘green’ features in a house such as the installation of a sunshade to reduce incoming heat into the house doesn’t make it wholly a green project because the environmental costs of building such houses comes in with a hefty ecosystem price tag.
As developers, we have to balance between affordability and practicability. One of REHDA’s top priority is promotion sustainable development projects. As a matter of fact, REHDA introduced the GreenRE (Green Real Estate) certification that is very similar to the Green Building Index (GBI), but cheaper than the GBI certification because REHDA wants to encourage more developers and its members to take up green projects for their developments.
The Industrial Building System (IBS) under the CITP allows manufacturers to produce housing materials as cheap as possible.
Other developed countries like China demonstrated the efficiency of the system by building a 57-floor skyscraper called Mini Sky City within 19 days because its use is like stacking Lego bricks. The system is readily available in Malaysia and has been introduced to various developers.
The construction cost using the IBS may seem to be more expensive than conventional methods due to higher logistic costs. Hence, the developers themselves must assume a new strategy or approach to ensure the costs of using the IBS can be lowered.
Malacca appears to have an issue with low supply of residential properties due to the higher allocation of properties to Bumiputeras. What can be done to curb this issue?
The Malacca state government had been consistent with the 60% against 40% Bumiputera ratio in housing sales and lately they have introduced projects with 70 to 80% quota for Bumiputeras, therefore creating a very small market for the non-Bumiputeras.
Malacca developers experienced good sales in the non-Bumiputera sector, but they will always have surplus when it comes to the Bumiputera units. REHDA have been engaging the Malacca government about this issue, because back then the state government allowed at least 5% to 6% release or conversion from Bumiputera units to non-Bumiputera ones.
Malacca appears to have an issue with low supply of residential properties due to the higher allocation of properties to Bumiputeras. What can be done to curb this issue? The Malacca state government had been consistent with the 60% against 40% Bumiputera ratio in housing sales and lately they have introduced projects with 70 to 80% quota for Bumiputeras, therefore creating a very small market for the non-Bumiputeras. Malacca developers experienced good sales in the non-Bumiputera sector, but they will always have surplus when it comes to the Bumiputera units.
REHDA have been engaging the Malacca government about this issue, because back then the state government allowed at least 5% to 6% release or conversion from Bumiputera units to non-Bumiputera ones.
Today, the policy has changed and the state government only allows the swapping method whereby we can swap Bumiputera units from one development with non-Bumiputera units to another development elsewhere with a condition that the exchange must be in terms of value. For example, if we have a RM1 million Bumiputera house in one development, we need five RM200,000 non-Bumiputera units to exchange. This will create an imbalance in the non-Bumiputera quota as there will be more Bumiputera units.
There must be a better release mechanism to bring balance back into the quota system, and REHDA has been trying to negotiate with the state government regarding this issue to allow the surplus of Bumiputera units to be released.
What is the property market outlook for Malacca next year?
The property market next year will be quite challenging in a sense that according to REHDA’s records, the project submissions by Malacca developers have reduced by 50% this year. I have also been told that on the national scale records, many developers are holding back on their projects submissions.
Hence, it could be quite a challenging market next year.
The demand for affordable housing in Malaysia is about 250,000 a year, but as of last year, there were only about 80,000 units being built. This has created a shortfall of 170,000 houses. With the reduced output for this year and the next, it will create an acute pressure on properties and this will inevitably cause property prices to increase.
My advice to consumers is to buy a property now. However, let’s not get too over-confident. If you fall within the category of the affordable range, and you can afford to pay for a property in the next two or three years, then go ahead and purchase one.
Under the current market conditions, if you are intending to buy a house and depend on rental returns, I would advise you not to. It is more feasible to buy a property for your own stay at the moment.